Time’s Up for Florida Operation That Pitched Worthless Timeshare Resale Scheme
Defendants permanently banned from selling timeshare resale or rental services, telmarketing
Along with being permanently banned from timeshare resale services and telemarketing, the Florida-based operators behind a deceptive timeshare resale scheme have agreed to surrender approximately $3.4 million worth of assets including homes, vehicles, a Rolex watch, silver coins, and a diamond ring to settle the Federal Trade Commission’s charges against them.
The principals behind the operation and their company, Pro Timeshare Resales, LLC, also are prohibited from making a range of misrepresentations during the sale of any other goods or services, are barred from collecting on outstanding customer accounts, and are prohibited from misusing the consumer information they’ve collected.
According to the FTC’s complaint, between November 2011 and December 2016 the defendants called timeshare property owners, falsely claiming that they had a buyer or renter ready and willing to buy or rent their properties for a specified price, or making false promises to sell the timeshares quickly, sometimes within a specified time period.
The defendants charged property owners up to $2,500 in advance but failed to deliver on their promises, the FTC alleged. The FTC noted in the complaint that the defendants strung some timeshare owners along with additional false claims, such as that they would soon receive money from a sale or rental, and often convinced them to pay for additional purported closing costs or other fees. Consumers’ requests for refunds were typically denied or ignored, according to the complaint.
After filing the lawsuit in December 2016, FTC staff obtained a temporary restraining order and, later, a stipulated preliminary injunction in the case. Through these orders the court halted the operation, froze the defendants’ assets, and appointed a receiver to oversee those assets, among other things.
The court order settling the FTC’s charges will ensure that the defendants do not engage in illegal conduct similar to what was alleged in the complaint. First, it permanently bans the defendants from marketing or selling timeshare resale services, or from assisting anyone else to do so. Next, it bans them from participating in telemarketing, either directly or through an intermediary.
The order prohibits the defendants from misrepresenting any material fact regarding the sale of any other goods or services, including making deceptive claims regarding the total cost of a good or service, the terms of a refund policy, or a product’s performance or efficacy.
The order also prohibits the defendants from collecting money from consumers who bought their timeshare resale services, and it prohibits them from selling or otherwise benefitting from the customer information they collected from consumers.
Finally, the order imposes an $18.7 million judgment against the defendants, which will be suspended once they have surrendered assets totaling approximately $3.4 million to the Commission. These assets include $1.84 million in cash currently held by the court-appointed receiver, real property worth approximately $600,000 owned by defendant Jess Kinmont, along with his Range Rover, Ferrari, Bayliner boat, and a Rolex watch.
Defendant John P. Wenz will surrender, among other things, $215,000 in brokerage and bank accounts, two homes, two trucks, silver coins, and a diamond ring. The defendants also are subject to standard monitoring and compliance provisions.
The Commission vote approving the stipulated final order was 2-0. The FTC filed the proposed order in the U.S. District Court for the Middle District of Florida, Orlando Division, and it has now been signed by the judge. The order settles the FTC’s charges against defendants Jess Kinmont; John P. Wenz, Jr.; Pro Timeshare Resales of Flagler Beach LLC; Pro Timeshare Resales, LLC; and J. William Enterprises, LLC, doing business as Pro Timeshare Resales.
The FTC thanks the Florida Attorney General’s Office, the Florida Department of Agricultural & Consumer Services, and the Better Business Bureau of Central Florida for their contributions to this case.
NOTE: Stipulated final orders or injunctions, etc. have the force of law when approved and signed by the District Court judge.
FTC Approves Final Order Imposing Conditions on Merger of Air Medical Group Holdings, Inc. and AMR Holdco, Inc.
Ambulance companies will divest air ambulance services in Hawaii
Following a public comment period, the Federal Trade Commission has approved a final order settling charges that a proposed merger is likely to harm competition among air ambulance transport services that transfer patients between medical facilities among the Hawaiian islands.
According to the complaint, which was first announced in March 2018, patients depend on air ambulance services when they need medical or surgical care that is not available in their local communities. Without a remedy, the acquisition would have combined the only two providers of air ambulance transport services operating in Hawaii and was likely to lessen competition and create a monopoly in the market for inter-facility air ambulance services in Hawaii, in violation of federal antitrust laws.
Under the terms of the settlement, AMR Holdco will sell its inter-facility air ambulance transport services business and supporting assets to AIRMD, LLC, which does business as LifeTeam.
The FTC worked with the Hawaii Department of the Attorney General on this case.
The Commission vote approving the final order was 2-0. (FTC File No. 171 0217; the staff contact is Sylvia Kundig, FTC Western Region-San Francisco, 415-848-5188.)
FTC Halts Deceptive Mosquito-Repellent Claims for Aromaflage Perfume and Candles
Zika and other efficacy claims false or unsubstantiated five-star reviews were by seller and family
A New Jersey-based company and its owners have agreed to settle Federal Trade Commission charges that they used deceptive claims to sell purportedly mosquito-repelling perfume sprays and scented candles. The FTC contends the company’s efficacy claims for its Aromaflage products – marketed as “fragrance with function” – are not supported by scientific evidence, and that multiple five-star Amazon reviews were written by one of the owners and her relatives.
Under an administrative consent agreement announced today, Mikey & Momo, Inc. and its principals Michael Fensterstock and Melissa Matarese Fensterstock would be barred from engaging in such deceptive conduct in the future and must clearly and conspicuously disclose any material connections between a reviewer or endorser and the product being reviewed.
According to the complaint, the respondents violated the FTC Act by deceptively advertising their Aromaflage and Aromaflage Wild products, including skin-applied “botanical fragrance & insect repellent” sprays and “botanical insect repelling” candles. The sprays and candles contained blends of essential oils such as vanilla, cedar wood, and patchouli.The respondents advertised their products as effective mosquito repellents and sold them on their website, in retail outlets, and on Amazon.com, charging $65 for a 50 ml bottle of spray and $40 for 7.5 oz. candle.
The FTC alleged that the respondents claimed on their website that the Aromaflage sprays were “as effective as 25% Deet over 2.5 hours.” The website also claimed the sprays and candles were “rigorously tested at one of the world’s leading Universities and found to be as effective at repelling mosquitoes as the leading brand” and “repels mosquitoes that may carry Zika, Dengue, Chikungunya, and Yellow Fever.” The respondents repeated many of the claims on their Amazon storefront.
The respondents’ Amazon storefront also included five-star product reviews by supposedly objective users, including Ms. Fensterstock using her maiden name, and her mother and aunts. The product reviews did not disclose the relationship between the endorsers and seller.
The complaint alleges that the respondents made false or unsubstantiated advertising claims: 1) about their products’ efficacy to repel mosquitoes, including those carrying the diseases cited, 2) that the sprays effectively repel mosquitoes for 2.5 hours, and 3) that the sprays and candles repel mosquitoes as effectively as 25% DEET. Further, the complaint charges the respondents with making false claims that the products are scientifically proven to work as advertised.
Finally, the complaint alleges that the respondents deceptively claimed that some of the reviews were by typical, unbiased users, and failed to disclose that those reviewers, including Ms. Fensterstock and her family members, had a material connection to the respondents and the products being reviewed.
The proposed order settling the FTC’s charges prohibits the respondents from making any of the misrepresentations alleged in the complaint, and requires them to disclose clearly, conspicuously, and in close proximity to an endorsement any unexpected connection between an endorser and the product or anyone associated with it.
The Commission vote to issue the administrative complaint and to accept the proposed consent agreement was 2-0. The FTC will publish a description of the consent agreement package in the Federal Register shortly. The agreement will be subject to public comment for 30 days, beginning today and continuing through June 4, 2018, after which the Commission will decide whether to make the proposed consent order final.
Interested parties can submit comments electronically by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.
NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $41,484.
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